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Chairman Smith Opening Statement: Markup of the Tax Relief for American Families and Workers Act

January 19, 2024

As prepared for delivery.

“The bill before us today is the result of a bipartisan conversation this Committee started more than ten years ago about how to reform the tax code in a way that supports workers, families, and small businesses. That conversation, which continued over 40 bipartisan hearings, led to the 2017 tax law, which was shaped by ideas championed by members on both sides of this Committee.

“After the 2017 tax law was signed into law, we saw economic growth surge a full point higher than the previous 10-year average. Unemployment and poverty dropped to their lowest rates in 50 years. And we saw the fastest two-year growth in wages in two decades.

“Last year, at our Committee field hearings in places like Petersburg, West Virginia, Yukon, Oklahoma, and Peachtree City, Georgia, we heard directly from the American people about how these policies helped their families, supported workers, and grew jobs and small businesses. But with some of these provisions phasing out or expiring, we have more work to do. 

“Right now, we at the Ways and Means Committee have an opportunity, as my colleague Mr. Neal often says, ‘to do big things.’

“This bill contains important provisions that individually have bipartisan support. Democrats have voted to extend R&D expensing. Republicans created the Child Tax Credit and support minimum work requirements to promote a connection to the workforce and greater prosperity.

“When we travel back to our districts next week, we can show our constituents who are struggling with inflation and high interest rates, that when Congress works together, we can still achieve big things: bipartisan tax relief that grows wages, supports better jobs, gives families more breathing room, and keeps America competitive on the world stage.

“The Tax Relief for American Families and Workers Act builds on many of the key provisions in the 2017 tax law that led to a roaring economy and raised workers’ pay. After that law was enacted, research and development investments skyrocketed by 18 percent, when it had been growing at a meager 1 percent for the prior five years. Restoring this provision will not only preserve over $70 billion in R&D investment but also help our manufacturing sector, which does the most R&D, allowing us to keep pace with China and other industrial nations.

“We also saw how small businesses benefited from interest deductibility – companies increased their investment by 17 percent and reduced their levels of debt. Right now, small- and mid-size-businesses are getting hammered by interest rates that are the highest in 23 years. Restoring this provision will create more than 850,000 jobs and $58 billion in additional take-home pay for workers.

“This bill also expands 100 percent expensing, which allows employers to fully deduct the cost of equipment and machines that increase productivity and worker wages. When this policy was originally implemented, investment in American businesses grew 20 percent. Under this bill, investment will grow by an additional $400 billion. Restoring this policy will increase wages, create more than 70,000 jobs, and incentivize more companies to bring their manufacturing back to the United States.

“In addition to building on these proven policies, we are also taking steps to rebuild American communities and grow small businesses. This bill includes tax relief for communities across the country that have been upended by man-made and natural disasters. 

“We are also cutting red tape for small businesses with a less burdensome reporting threshold for subcontractors’ work – the first update to that threshold in more than 70 years.

“Just as important, this bill will ensure that parents can finally catch a break by building on the current child tax credit that supports families and rewards work.

“And finally, we are going after waste and fraud that has come to define so many pandemic-era programs. This bill will save over $70 billion in taxpayer dollars by closing out the COVID-era Employee Retention Tax Credit Program, which has become overrun with fraud and ballooned in cost six times larger than CBO’s original estimate.

“The bill before us today represents bipartisan policies that are proven and effective; common sense fixes to the tax code that will rebuild our communities, support better jobs and wages, and grow our economy. Many members on both sides of this Committee are cosponsors of the different policies in this legislation.

“I look forward to today’s conversation. 

“Let’s remind the American people what this Committee can accomplish when we work together.”